Can CPAs Solve the Savings Crisis?
CPAs are perfectly positioned to advance financial literacy and planning.
“Folks want to save, know they should, but
they are overwhelmed by convoluted options,
complex tools, and financial jilting-jargon.
How can we fix this?” – Ken Fisher
Country Financial has new data showing just how financially
strapped our compatriots are: Almost one in five Americans (19
percent) wouldn’t be able to pay their bills within one month of
losing their jobs and that figure jumps to 37 percent for those
earning less than $30,000 per year.
Exacerbating the situation, Bankrate.com found that 24
percent of Americans have no savings set aside in case of
emergency and 60 percent wouldn’t be able to cover an
unexpected $500 expense.
What’s interesting about America’s savings crisis is that it spans
the population. Last year, a Federal Reserve study on the
economic wellbeing of U.S. households found that spending
equaled or exceeded annual income for individuals earning less
than $40,000 (69 percent), $40,000 to $100,000 (44
percent), and more than $100,000 (32 percent). It’s no wonder
why consumer debt is spiking to record levels.
Federal Reserve data released earlier this year shows U.S.
consumers are carrying balances totaling more than $1 trillion
on their credit cards, up 6.2 percent from a year ago and the
highest amount since our time of financial crisis in January
2009. This is in addition to the more than $1 trillion in auto loan
debt Americans are saddled with, and student loan debt has
nearly tripled in the last decade to over $1.4 trillion.
The bottom line is that too many of us are making the costly
mistake of spending too much and not saving enough. That
said, it’s highly likely that many of your clients, prospective
clients, and even friends and family may have large
amounts of debt and little to no savings set aside. And this is
where you come in.
“CPAs skilled at organizing financial information and wrestling
with the most complex set of laws, regulations, and filing
requirements in the world—the Internal Revenue Code (this may
only be a slight exaggeration)—have an important role to play
in combating our savings and debt crises,” says James Sullivan,
CPA, PFS, Illinois CPA Society member and board member of
Consumer Debt Counselors Inc.
Sullivan says the need for financial counseling and guidance
is unprecedented, and CPAs are the perfect candidates to
provide it, both as a public service and as a business
development tool. “With an overwhelming need and the right
tools, CPAs can take advantage of a growing practice
development opportunity by delivering a valuable service to
Illinois students and families,” he adds.
As respected business advisors and finance experts, CPAs are
perfectly positioned to advance financial literacy and planning
in their communities. Are you ready to help make a difference
in someone’s financial future?